Miliband threatens banks break-up under Labour government

Labour leader Ed Miliband has threatened that the Labour party could forcibly break up some of Britain’s largest banks if they do not go far enough with reforms intended to prevent another credit crunch.

Labour leader Ed Miliband has proposed more radical banking reforms which go beyond those of the Conservative party, if the Labour party were to be elected in 2015. Photo: Martin Argles

The current government has promised that radical reforms will be implemented by 2019, with a statement from the Treasury saying: “The government is undertaking radical reform of the UK banking system to ensure that the mistakes of the past aren’t repeated.”

Some proposals so far have included separating the investment side of banks from its accounts with individuals and small businesses, in order to protect the high street.

Miliband, however, has accused the Conservative coalition of softening its proposals in the face of influential lobbying from the industry. Mr Miliband said he believes the government should be taking a different approach, and reiterated that if serious changes are not seen by the time of the next election in 2015, and Labour were to win, then drastic action may be taken.

He said: “Yes there would be cuts if we were in government, but if you make the pace of those cuts slower, if you take less money out of the economy now it will be better for our economy.”

The British Bankers’ Association (BBA) has also committed to making changes in order to protect the British economy. A BBA statement reads: “The UK’s major banks have committed publicly to further change – to do whatever is necessary to restore financial stability.”

Banking reforms are not the only reforms promised by the Labour party if they were to be elected at the next election. The party is said to be considering replacing university top-up fees with a graduate tax, on top of the party’s pledge to lower fees by one third to £6000.